Could Texas lawmakers end the state’s renewable boom?
…Texas state senators backing the policy changes want to double down on natural gas, a move they say would make the state’s isolated power grid more reliable. Critics argue the bills they’ve proposed would do little to keep the lights on — while chilling solar and wind projects despite historic federal support for those technologies.
“If I’m a wind or solar developer, there’s been so much anti-renewable talk or actions contemplated in a wide variety of legislation, why would I come to Texas?” said Beth Garza, a senior fellow at the R Street Institute who previously served as independent market monitor for the Electric Reliability Council of Texas (ERCOT), the state’s main grid operator.
Several proposed bills have cleared the Senate, but they could face scrutiny in the state House where lawmakers seem less bullish on upturning the energy market. The bills include a controversial plan to build a state-backed fleet of natural gas-fueled power plants. Others would target the laissez-faire regulatory environment that has allowed renewable energy to flourish, including by requiring renewable energy projects to pay for backup power or by adding new grid connection fees.
If Texas grid legislation becomes law, it could cause a shake-up where renewable energy gets built in the south-central United States, Garza said, noting the solar and wind potential of neighboring Oklahoma and New Mexico. Some of the proposed changes could also bring new grid connection and permitting slogs seen in other states that Texas has historically avoided…
While new energy projects in most of the country are bogged down by lengthy interconnection delays, ERCOT has one of the fastest processes, according to data from the Department of Energy.
Energy companies in Texas are not required to pay for transmission upgrades associated with connecting their projects to the ERCOT system, said Garza of the R Street Institute. Instead, those transmission costs are paid for by all electricity consumers, she said. That contrasts with the systems in place in other parts of the U.S., whereby developers of new energy projects must pay for grid upgrades themselves.
But S.B. 1287 would create a new process in Texas for allocating certain grid connection costs to companies seeking to connect in ERCOT. According to Garza, backers of the bill are concerned that transmission costs have been rising in Texas and want less of those costs to fall to consumers.
Even so, transmission is typically “still a minority of the portion of customers’ bills,” she said. “At the same time, access to lower-cost energy has driven down the generation portion of people’s bills tremendously.”